Brutally cold winter weather isn’t doing much to help the U.S. housing market.

On Monday, the Commerce Department reported that new home sales declined in December to 414,000, coming in short of the 455,000 annual paces forecast by economists. It is also the lowest level since the summer, when rising mortgage rates undermined demand. Adding to worries, Barclays downgraded KB Home (KBH) to Underweight and cut Toll Brothers (TOL) to Equal Weight, predicting relative flat homebuilder margins amid decelerating price trends.

Granted, new home sales are a volatile data set to begin with, especially during the winter months when seasonal adjustments can skew the results. That goes double this year, which of course has been unusually cold.

Prices are up, mortgage rates are rising and personal income is trailing. Foreign buyers will continue to feed on our relatively cheap market, though.

Nevertheless, exchnage-traded funds linked to the housing market got a boon today. The iShares U.S. Home Construction ETF (ITB) rose 3.32% to $24.41 after 4.8 million shares changed hands compared to the average daily trading volume of 4.5 million.

About Focus on Funds

With exchange-traded funds ballooning in popularity, it’s harder to and more important to separate fact from fiction. On the Focus on Funds blog and ETF Focus column, L.A. native Crystal Kim lifts the hood on ETFs, mutual funds and hedge funds to highlight overlooked values, actionable ideas and potential pitfalls.